What is the Maximum Social Security Tax one should pay for 2001? or for Present year?


P

Paul Thomas, CPA

theloneranger100@aol.com said:
I remember there is a ceiling one should pay per year. is it $6,300? or
something? I believe Turbo Tax screwed me, back then. Today I have
problem with SS earning report.



Back in 2001 the maximum earnings subject to Social Security was $84,900,
with the employee half being $5263.80.

The Social Security Administration takes the earnings reports from W-2's
submitted by your employer, plus any earnings from Schedule C, F, or
partnership earnings reported on a K-1 and your subsequent Schedule E.

Turbo Tax couldn't have "screwed you" back then or today. If your earnings
were underreported to SSA (that would have been by your employer) or the IRS
(that would be you filing out the forms), then you have an issue that you
need to correct. Remember that there may be additional tax due on the
additional earnings that should have been subjected to SE tax back then.
 
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T

theloneranger100

I remember there is a ceiling one should pay per year. is it $6,300? or
something? I believe Turbo Tax screwed me, back then. Today I have
problem with SS earning report.



Thanks for your advice.
 
T

theloneranger100

Paul Thomas said:
Back in 2001 the maximum earnings subject to Social Security was
$84,900,
with the employee half being $5263.80.

The Social Security Administration takes the earnings reports from W-2's
submitted by your employer, plus any earnings from Schedule C, F, or
partnership earnings reported on a K-1 and your subsequent Schedule E.

Turbo Tax couldn't have "screwed you" back then or today. If your
earnings
were underreported to SSA (that would have been by your employer) or the
IRS
(that would be you filing out the forms), then you have an issue that
you
need to correct. Remember that there may be additional tax due on the
additional earnings that should have been subjected to SE tax back then.
--
Paul A. Thomas, CPA
Athens, Georgia


with the employee half being $5263.80.
How do you come up with this number? I wish I know the factor.

Yes TurboTax did screwed me, this is for 2000's earning. I had $3,650
paid thru W2, and $4007.23 paid through Self-employment Tax calculated by
TurboTax2000. Separately from Federal Income tax. Do you know where
should I get this extra payment back? That same year they IRS only
reported to SS my W2 earning, said Social Security Office. It appears
that the IRS is the one taking the $4007.23 for free.

Thank you for your response.
 
D

D. Stussy

theloneranger100@aol.com said:
How do you come up with this number? I wish I know the factor.

Yes TurboTax did screwed me, this is for 2000's earning. I had $3,650
paid thru W2, and $4007.23 paid through Self-employment Tax calculated by
TurboTax2000. Separately from Federal Income tax. Do you know where
should I get this extra payment back? That same year they IRS only
reported to SS my W2 earning, said Social Security Office. It appears
that the IRS is the one taking the $4007.23 for free.

Thank you for your response.
First of all, SE tax isn't quite the same as SS taxes for an employee. With
SE tax, you pay the EMPLOYER's share of the SS taxes also.

The 2000 limit on wages was $76,200, for taxes (SS + Medicare) of $5,829.30
to the employee ($4,724.40 SS and $1,104.90 Medicare).

The factors are: SS = 12.4% and Medicare 2.9%. Employers and employees
each pay half. Self-employed pay all. The employer's half is deductible
against the income tax.

If you had $3,650.00 paid via a W-2, your wages (for SS/Medicare purposes)
were about $47,712.42.
If you had additional SE tax of $4,007.23, your SE income was about
$28,360.63.
If those numbers are not correct (within rounding error), then you have
bigger issues than the SSA not recording it.
 
P

Paul Thomas, CPA

theloneranger100@aol.com said:
Yes TurboTax did screwed me, this is for 2000's earning.

Well, is it for 2000, or 2001?



I had $3,650 paid thru W2, and $4007.23 paid through
Self-employment Tax calculated by TurboTax2000.

The W-2 earnings are reported to SSA by your employer. Tax software has
nothing to do with that. Your tax retuirn has nothing to do with that. You
could have earnings from wages, receive the earnings credit, and not be
required to file a return. So the IRS has nothing to do with that.

For the W-2, it's your employer sending the W-2 to the SSA directly. Your
software and the IRS are not involved.



Do you know where should I get this extra payment back?

What payment are you talking about? Anything due to you (tax wise) is long
past the stature of limitations for refunds.

If your earnings are not reported correctly on the SSA statement - that is
what you mean, isn't it? - then talk to SSA. They have a system to correct
errors in the earlier years.





That same year they IRS only reported to SS


The IRS would only tell SSA about earnings from self-employment. SSA gets
your wage data directly from the employer.

In fact, it's the SSA that tells the IRS about your wage earnings.



my W2 earning, said Social Security Office.

The person at SSA doesn't know how their own system works.


It appears that the IRS is the one taking the $4007.23 for free.



Is that your tax you paid in the form of self-employed earnings (SE tax)?
Or is that the amount of your self-employed profits (bottom line Schedule C)
in that year?
 
D

Douglas W. \Popeye\ Frederick

theloneranger100@aol.com said:
How do you come up with this number? I wish I know the factor.

Yes TurboTax did screwed me, this is for 2000's earning. I had $3,650
paid thru W2, and $4007.23 paid through Self-employment Tax calculated
by
TurboTax2000. Separately from Federal Income tax. Do you know where
should I get this extra payment back? That same year they IRS only
reported to SS my W2 earning, said Social Security Office. It appears
that the IRS is the one taking the $4007.23 for free.

Thank you for your response.

Based on IRS's 3 transcripts, someone from the IRS deliberately took
advantage of my overpayment and adjusted my gross income down without an
explanation. Their transcripts don't match each others. I heard that
taxpayers cannot reclaim anything after the 4th years back.

My main concern is, to get Social Security Office to fix their report of
my income. Can you imagine a gross income of 128K was only reported
$11.8K? Something is so wrong, it started from a stupid TurboTax.

The IRS should have notified me of my overpayment, they didn't, not only
that they reported only my W2 earning to Social Security Office. For 5yrs
I have problem trying to get SS to fix their report problem, until today
they said they only report what they got from the IRS.
 
T

theloneranger100

D. Stussy said:
First of all, SE tax isn't quite the same as SS taxes for an employee.
With
SE tax, you pay the EMPLOYER's share of the SS taxes also.

The 2000 limit on wages was $76,200, for taxes (SS + Medicare) of
$5,829.30
to the employee ($4,724.40 SS and $1,104.90 Medicare).

The factors are: SS = 12.4% and Medicare 2.9%. Employers and employees
each pay half. Self-employed pay all. The employer's half is
deductible
against the income tax.

If you had $3,650.00 paid via a W-2, your wages (for SS/Medicare
purposes)
were about $47,712.42.
If you had additional SE tax of $4,007.23, your SE income was about
$28,360.63.
If those numbers are not correct (within rounding error), then you have
bigger issues than the SSA not recording it.

Hi D,

Thanks for your explanation. $4007.23 is the number from IRS transcript,
I cannot substantiate it. Their transcripts don't even match each other.
I actually paid $5,906 for Self-employment Tax, it shows on my 1040X line
9. Line 12, Estimate tax paid $15,250+ Line 17 $2,956 (paid on a return)
for this income >>> $56,723 income. No Penalty involvement. The W2
withholding is separate from these amounts. For some reason TurboTax
splitted this $56,723 income into two pieces, it thinks my wife got to
have a share. She worked and she had her W2 withhold as well. What a
mess! Since then I never want to use TurboTax any more. It caused me to
overpaid Social Security. Even though I overpaid SS, I would just forget
it, all I care about now is to have IRS report my $56,723 to SS Office.
 
P

Phil Marti

theloneranger100@aol.com said:
I know for W2 workers, I am a self-employed person, I paid the whole thing
to IRS including my SS, and I assume IRS would pay SS on my behalf. Isn't
it the way it works?
At some point in the ramblings about sofware errors and IRS conspiracies you
mentioned that your concern is correcting your Social Security earnings
record. Try to stay focused if that's your goal.

You need to resolve this with Social Security. It's the only way you're
going to get it fixed. Call them.
 
T

theloneranger100

Paul Thomas said:
Well, is it for 2000, or 2001?






The W-2 earnings are reported to SSA by your employer. Tax software has
nothing to do with that. Your tax retuirn has nothing to do with that.
You

I know for W2 workers, I am a self-employed person, I paid the whole thing
to IRS including my SS, and I assume IRS would pay SS on my behalf. Isn't
it the way it works?
 
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T

theloneranger100

theloneranger100@aol.com said:
Hi D,

Thanks for your explanation. $4007.23 is the number from IRS
transcript,
I cannot substantiate it. Their transcripts don't even match each
other.
I actually paid $5,906 for Self-employment Tax, it shows on my 1040X
line
9. Line 12, Estimate tax paid $15,250+ Line 17 $2,956 (paid on a
return)
for this income >>> $56,723 income. No Penalty involvement. The W2
withholding is separate from these amounts. For some reason TurboTax
splitted this $56,723 income into two pieces, it thinks my wife got to
have a share. She worked and she had her W2 withhold as well. What a
mess! Since then I never want to use TurboTax any more. It caused me
to
overpaid Social Security. Even though I overpaid SS, I would just
forget
it, all I care about now is to have IRS report my $56,723 to SS Office.

Part of my problem was ine, I filed the return the last day without
sufficient time to review/correct the errors.
 
P

Phil Marti

theloneranger100@aol.com said:
Thank you Phil, but in order to correct SS record, I have to start from
IRS, because SS claimed they did not receive my SE earning from them.
Then you need to provide SS with your 1040 Schedule SE for the year in
question. If you can't find your copy, you can see if IRS has a copy of
that year's return. I don't know whether they do.

If, for whatever reason, you didn't report your earnings for the year in
question on a Schedule SE by 3 years from the due date of that return,
you're out of luck. It's the law.

For lurkers, this is an example of why it's critical to check your SS
earnings record regularly so you can fix errors while all the information is
readily available.
 
T

theloneranger100

Phil Marti said:
At some point in the ramblings about sofware errors and IRS conspiracies
you
mentioned that your concern is correcting your Social Security earnings
record. Try to stay focused if that's your goal.

You need to resolve this with Social Security. It's the only way you're
going to get it fixed. Call them.

Thank you Phil, but in order to correct SS record, I have to start from
IRS, because SS claimed they did not receive my SE earning from them.
 
P

Paul Thomas, CPA

I know for W2 workers, I am a self-employed person,
I paid the whole thing to IRS including my SS,
and I assume IRS would pay SS on my behalf.

The IRS collect the tax and accounts for the various sources of tax income.

They would eventually report the net profit to SSA - I don't know the time
frame for doing so.


Any benefits you receive is strictly based on the amount of wages received
or net profits reported. The tax paid is meaningless, as you'll get the
benefits even if you or your employer never paid a dime.



Isn't it the way it works?




If you feel that the earnings (wages and self-employment profit) is not
recorded correctly with SSA, then be talking to them about how to correct
your records.


There's no one else that can help you but SSA.
 
R

rick++

This year it is about $6300.
But that has been increasing about 5% each year.
By the 1983 law, the ceiling tracks the 90th percentile wage.
 
T

theloneranger100

rick++ said:
This year it is about $6300.
But that has been increasing about 5% each year.
By the 1983 law, the ceiling tracks the 90th percentile wage.
If what you saying is true, then the figure should be like this table?



2008 $6,300.00 95%
2007 $5,985.00 95%
2006 $5,685.75 95%
2005 $5,401.46 95%
2004 $5,131.39 95%
2003 $4,874.82 95%
2002 $4,631.08 95%
2001 $4,399.52 95%
2000 >> $4,179.55 95%




$4,179 Max for 2000?

It looks different from other people's figure.
 
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T

TheLoneRanger

This year it is about $6300.
But that has been increasing about 5% each year.
By the 1983 law, the ceiling tracks the 90th percentile wage.
I'm sorry........I'm a DumbAss that Flunked Math...........
 

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